Furlough over Christmas?

18 December 2020

In the run up to Christmas, some employers will be considering whether they can place some or all of their employees onto furlough, either for a period of annual leave, or during periods of business closure, in order to claim a contribution towards their wages.

However, this month, Government guidance has clearly stated that employers should not put employees on furlough just for them to take holiday, or for a shutdown period which is not related to the effects of the pandemic.

It is not clear how breaches of this rule would be identified, but obviously there is a risk that claims under the furlough scheme (the Coronavirus Job Retention Scheme) could be refused if the employer is found to have claimed for its employees during a shutdown or holiday period.

If employees are on furlough due to the effects of the pandemic, employers can ask them to take holiday during their furlough period, but pay should be topped up to 100% of each employee’s usual pay by the employer, and the employer needs to provide adequate notice for the leave to be taken.

The notice period needs to be at least twice as long as the amount of leave the employer wants their staff to take. For example, if an employer wants their employees to take a week off over the Christmas period, they should notify them of this at least two weeks before the first day of leave. There may additionally be clauses in the employment contract which specifically cover notice, or may dictate that there is a usual closure period over Christmas which employees must reserve part of their annual leave entitlement to use during that time.

If an employer wants an employee to take leave on a particular date it will be more difficult with employees who are on sick leave, as in that situation employees can choose not to agree. However, some employees may prefer to agree so as to benefit from having some days off at full pay rather than the furlough rate.